Commerce · Ch 21 — The Sale of Goods Act, 1930
Conditions and Warranties
Conditions and Warranties
Every contract of sale contains stipulations (terms) about the goods being sold. The Act divides these stipulations into two categories — conditions and warranties — and the whole practical importance of the distinction lies in what remedy is available if the stipulation is broken.
Condition — a stipulation that is essential to the main purpose of the contract. If a condition is broken, the aggrieved party (usually the buyer) has the right to treat the contract as repudiated — that is, to reject the goods altogether and refuse to go through with the contract, in addition to being able to claim damages.
Warranty — a stipulation that is only collateral (secondary) to the main purpose of the contract. If a warranty is broken, the aggrieved party can only claim damages; they cannot reject the goods or refuse to complete the sale.
| Basis | Condition | Warranty |
|---|---|---|
| Importance to the contract | Essential to the main purpose | Collateral (secondary) to the main purpose |
| Effect of breach | Contract can be repudiated (goods rejected), and damages claimed | Only damages can be claimed; contract must still be performed |
| Example | Buying a car specifically described as a "2020 model", which turns out to be a 2018 model — a breach going to the very reason the buyer wanted this car | Buying a car with a general assurance that it "will be serviced free once during the first year", and the free service is not given — a side promise, not the core reason for the purchase |
Under certain circumstances, a breach of condition can be treated as if it were only a breach of warranty — for instance, where the buyer has already accepted the goods (or part of them) and cannot now reject them, the buyer may be left only with a claim for damages even though what was broken was technically a condition.
Implied Conditions — conditions the law reads into every contract of sale automatically, even if the parties never mention them:
- Condition as to title — the seller has the right to sell the goods (owns them or is authorised to sell them), and in a sale of specific goods, has that right at the time ownership is to pass.
- Condition as to description — where goods are sold by description, they must correspond with that description.
- Condition as to sample — where goods are sold by sample, the bulk must correspond with the sample in quality.
- Condition as to fitness/quality (in specified circumstances) — where the buyer makes known to the seller the particular purpose for which the goods are required and relies on the seller's skill or judgment, and the goods are of a description the seller ordinarily supplies, there is an implied condition that the goods will be reasonably fit for that purpose.
- Condition of merchantable quality — where goods are bought by description from a seller who deals in goods of that description, there is an implied condition that the goods will be of merchantable (saleable, reasonably usable) quality.
Implied Warranties — warranties the law reads into every contract of sale automatically: …